Apple: Q4 2010 Earnings Preview

As the market grinds higher in anticipation of a second round of quantitative easing (QE2), all eyes are on Apple as the company sets to report fiscal earnings for its fourth fiscal quarter of 2010 on Monday after the bell.

Analysts polled by Thomson Reuters expect Apple to report approximately $4.06 in EPS on about $18.86 billion in revenue. Yet, according to a more recent poll, professional analysts are looking for Apple to earn closer to $4.11 in EPS on $18.95 billion in revenue. The "professionals," on average, expect revenue to be driven primarily by sales of 11.38 million iPhones, 9.54 million iPods, 3.78 million macs and 4.73 million iPads.

Yet, for those not living under a rock for the past three years, the more reliable estimates come by way of the so-called "Unaffiliated Analysts." According to this collection of bloggers — who almost always outperform professional Wall Street analysts — investors should expect to see Apple report about $4.73 in EPS on approximately $20.37 billion in revenue. The general consensus among the unaffiliated blogger-analysts is that revenue will be driven by sales of 12 million iPhones, 9.74 million iPods, 4.01 million macs and 5.52 million iPads.

Based on my earnings model (see here), my estimates this quarter fall on the lower end of the unaffiliated analyst estimates. My model is looking for Apple to report earnings of about $4.64 in EPS on about $19.6 billion in revenue. I'm looking for Apple to report sales of 12 million iPhones, 3.92 million macs, 10 million iPods and 5 million iPads.

Yet, despite my earnings model giving a slightly more conservative outlook for Apple's fiscal Q4, I think its very important that a certain level of deference should be afforded to the general unaffiliated analyst consensus. Investors should consider the reports and earnings models of each of the unaffiliated analysts. The table below outlines my detailed earnings model for Apple's fiscal Q4.

Bullish Cross Past Performance

One more thing...Here is how I did against the entire analyst community last quarter. Under one rating done by Philip Elmer-DeWitt at Fortune (click here) I finished 4th overall out of 32 analysts polled. And under Daniel Tello's more comprehensive rating of all the analysts (click here) I finished 6th overall out of 32 analysts polled across all categories. Notice how the bloggers (notated in Green) collectively outperformed the professional analysts (notated in Red) by a wide margin as a whole.

AppleInsider will provide full coverage of Apple's earnings and ensuing quarterly conference call beginning at 4:35 eastern time today.

The only question I have is how many iPhones and iPads have to be sold to make the doubters choke on their words. I have never cared about the number of iPhones sold until now, as there has been a massive, coordinated effort to constrain sales with FUD.

As for iPads, I think 4.5M would be plenty, as that would represent 1.5M per month since release. That would more than justify all the hype about sales for the iPad.

Since the media have mocked the professional's by showing the accuracy of many amateur pundits' higher estimates these last few years it's a pretty good guess the professionals will start getting braver and guessing higher.

One day Apple will logically only achieve what everyone predicts and that will be seen as a massive failure! I can't imagine the panic should Apple ever just miss these wild guesses even if the results are stellar.

I keep thinking iPhone numbers are too high and iPad too low from the analysts. It looks like either the "stupid money" is piling into AAPL now, or the smart money is assuming $4.75-5 in EPS on $20B revenue.

Thank you, thank you. None of the "professional" sites provided the time of the conference call.

Sheesh.

Does your investment firm not keep you in the loop with weekly emails letting you know this kind of stuff?

If the answer is no, I would be making a phone call or two letting them know just how awful their service is, it's their job to make sure you are informed as a client and as best they can; if you have AAPL in your portfolio they should be keeping you up to date with this type of information as it's important to your financial future.

The only question I have is how many iPhones and iPads have to be sold to make the doubters choke on their words. I have never cared about the number of iPhones sold until now, as there has been a massive, coordinated effort to constrain sales with FUD.

As for iPads, I think 4.5M would be plenty, as that would represent 1.5M per month since release. That would more than justify all the hype about sales for the iPad.

Who cares if someone "chokes on their words"!!! If you have stock in Apple just be happy. If you like Apple products, that is also good, cause they obviously will be around awhile. If you are looking for a world where everyone thinks that Apple is the greatest, you will be sorely disappointed.

BTW, If Apple doesn't have any "competition" why don't they have 90% of the market. Maybe it is because they can't make their "Amazing" products fast enough. I just wish their "Amazing" iPhone was at least good at being a phone. I guess that is too much to ask from an "Amazing" product. I guess it better to focus on features/things that you can impress your friends with.